The S&P 500 technology index gave the S&P 500 its biggest boost, while the PHLX semiconductor index also rose, extending Wednesday's strong gains.

U.S. regional bank shares fell after the Biden administration proposed a limited list of new measures to strengthen mid-sized banks that it said could be pushed through without having to go to Congress.

The KBW regional bank index was lower, and the S&P 500 financial index was the only S&P 500 sector in negative territory on the day.

"Tech is probably the furthest sector removed from financials," so there has been a rotation away from financials, said Jack Ablin, chief investment officer at Cresset Capital in Chicago.

The banking turmoil, which started earlier this month with the collapse of two regional U.S. lenders, had sparked concerns about a broader financial crisis.

Investors also awaited the February reading of personal consumption expenditures (PCE) price index due Friday, which could offer more clues about the Federal Reserve's interest rate path. January figures showed a sharp acceleration in consumer spending.

According to preliminary data, the S&P 500 gained 22.59 points, or 0.56%, to end at 4,050.40 points, while the Nasdaq Composite gained 87.39 points, or 0.73%, to 12,013.62. The Dow Jones Industrial Average rose 142.29 points, or 0.43%, to 32,859.89.

Data earlier on Thursday showed jobless claims last week rose more than expected from the week before, indicating a cooling labor market. Separately, fourth-quarter GDP growth was slightly lower at 2.6% compared with earlier estimates of 2.7%, both supporting the case for a softer Fed policy.

Among other stocks, Faraday Future Intelligent Electric Inc rose after the company said it had started production of its first luxury electric car after a months-long delay.

U.S.-listed shares of Alibaba Group Holding advanced on a report that its logistics arm had started preparations with banks for its Hong Kong initial public offering, while those of JD.Com jumped on plans to spin off its real estate infrastructure arm.